Insurance in Ontario. What You Need to Know

Transcription

1 Insurance in Ontario What You Need to Know

2 KNOW YOUR POLICY Insurance is an important part of your financial security. INSURANCE CAN HELP YOU WHEN: an auto accident prevents you from working; a severe weather event leaves you with no place to live; or property damage interrupts your business. It s important that you take the time to carefully choose an insurance policy that best suits your needs and finances. It s equally important that you read your policy to know what is covered and what is not covered. If you have any questions, don t hesitate to ask your broker or call your insurance company. DID YOU KNOW? Insurance is all about pooling risk. The premiums of the many pay for the losses of the few. Even if you haven t made a claim, sometimes your rate will go up because of the actions of others. 2

3 COMPETITION AND CHOICE Competition works! Consumers are best served when insurance companies compete for business by offering different products and services at the lowest rates possible. In most other countries, auto insurance prices and products are determined by competition, not by government approval. In Ontario, any changes to your auto insurance premiums must first be approved by the government regulator. However, even within the constraints of regulatory control, companies still have to compete to get your business. SHOP AROUND A competitive marketplace allows consumers to shop around for the products, prices and services that best suit their needs. It pays to shop around for insurance in the same way you would for other important goods or services. There are three ways you can buy insurance: 1. From a broker who deals with a number of insurance companies and who tries to find you the best deal; or 2. From an agent who sells insurance for just one company; or 3. Directly from an insurance company through a call centre and/or website. If you buy your insurance through a broker, make sure to ask which companies your broker represents. FACT: A total of 145 companies sell auto and home insurance in Ontario. 3

4 WATER IS THE NEW FIRE Today, water is the leading cause of property damage in Canada. Losses related to water damage cost Canadian insurers and policyholders at least $1.3 billion every year. Water damage caused by sewer backup is covered if it is included in your home insurance policy. Sewer backups can happen during intense rainstorms when aging municipal sanitary and storm sewer infrastructure becomes overloaded. Talk to your insurance representative to see if you re covered. What to do after water damages your property: Be careful! Don t turn on any electrical switches until your electrical system has been checked. If you have gas service, check for fumes. Protect your property from further damage. Board up holes or shut off water supplies to ensure your belongings are not damaged further. Move items out of wet basements and away from flooded parts of your home. Call your insurance representative. Let your insurance representative know what has happened as soon as possible. Your representative will work with you to assess the damage and see that you are compensated as quickly as possible for any losses covered by your policy. 4 WHY ISN T OVERLAND FLOODING COVERED BY HOME INSURANCE? Insurance is designed to spread risk among many policyholders. Generally, flooding is a risk for only a small percentage of the population those who live on flood plains or in flood-prone areas. As a result, the price of flood coverage would be very high for the small number of people who would need it.

5 UNNATURAL DISASTERS The year 2010 proved to be another record-breaker for weather-related events. Severe weather across the country caused personal suffering and tremendous economic losses for Canadians. Unsurprisingly, the increased severity and frequency of weather events also led to a significant rise in insurance claims costs. Leamington, Ontario ALBERTA HAILSTORMS Powerful hailstorms and windstorms hit Calgary and southern Alberta resulting in $500 million in insured damage. ONTARIO TORNADOES Severe tornadoes ripped through Midland and Leamington, Ontario causing $90 million in insured damage. ATLANTIC HURRICANES In September, flooding and hurricanes hit Atlantic Canada with ferocity. Hurricane Earl and Hurricane Igor together caused over $75 million in insured damage. Community Assistance Mobile Pavilion (CAMP) When disasters do strike, IBC s Community Assistance Mobile Pavilion can assist victims by providing on-site insurance information. To see CAMP in action, please visit IBC s YouTube channel at youtube.com/ insurancebureau. CAMP was launched during Emergency Preparedness Week in Ontario on May 3, Cam Woolley, CP 24; Heather Mack, IBC Mgr of Government Relations, ON; Rick Bartolucci, former ON Minister of Community Safety and Correctional Services and current Minister of Municipal Affairs and Housing; and Dan Hefkey, Chief of Emergency Management Ontario. 5

6 HELPING CONTROL YOUR PREMIUMS To ensure you re getting the most out of your home, car or business insurance, review your policy carefully and follow these premium-saving tips: TIPS SHOP around and compare. Be honest about the type of coverage you need. Details matter. REQUEST a higher deductible. Your premiums will be lower if you agree to increase the amount of a claim you are willing to pay out of your pocket. MANAGE your risks. For example, install a monitored burglar or fire alarm system in your home or business and install an approved theft deterrent system in your vehicle. LOOK for policy-bundling discounts. If you already have auto insurance with one company, ask about buying home insurance from that company. When purchasing business insurance, be sure to SPEAK to an insurance professional who understands your particular business. DO RENTERS NEED INSURANCE? The answer is Yes. Tenant insurance can offer you protection in several ways: by insuring your contents, by protecting you from liability and by providing additional living expenses should your apartment become uninhabitable. 6 DID YOU KNOW? You should insure your home according to what it would cost to rebuild it in the event it is destroyed. This amount is called the replacement cost, and it is different from the market value of your home and even from your tax assessment value. An accurate assessment of your home s replacement cost is essential to making sure you have enough coverage.

7 LOSS PREVENTION To prevent or minimize water damage: Install a sump pump. Where by-laws allow, install a sewer backup or backflow valve. Use a rain barrel to catch water runoff. Ensure proper grading around your home. Remove or elevate valuables from basement floors. To prevent or minimize wind damage: Install impact-resistant windows. Reinforce garage doors. Keep trees and shrubbery well trimmed. To keep water in pipes from freezing: Fit exposed pipes with insulation sleeves. Open all cabinet doors during a cold spell to allow warm air to circulate. DON T FORGET TO: Develop a disaster preparedness plan and create an emergency preparedness kit for your family. To learn more about what to include in your emergency kit, visit ibc.ca. Make an inventory of your possessions, include photos, keep it in a safe place and update it at least once per year. Report any home renovations to your insurance company. Make sure your home is properly insured. Start by completing a home assessment checklist. Visit ibc.ca to complete your home assessment checklist. Install an approved theft deterrent system in your car. Keep valuables in the trunk or glove compartment. Never leave your car unlocked and running. Don t drive distracted! Distracted drivers are just as impaired as drunk drivers. FOR MORE INFORMATION about home, car or business insurance, please contact Insurance Bureau of Canada ONTARIO CONSUMER INFORMATION CENTRE Tel: Toll-free: (Ontario only) Hours: M F 8:00 a.m. 5:00 p.m. 7

8 CLIMATE ADAPTATION Canadians are witnessing the devastating effects of extreme weather from coast to coast. IBC has been an active champion of climate adaptation across Canada, developing new ways to help consumers and communities prevent waterrelated losses, sharing important adaptation messages and calling on governments to improve municipal infrastructure. IBC is developing the world s first and only MUNICIPAL RISK ASSESSMENT TOOL to help municipalities identify sanitary and storm sewer infrastructure weaknesses and allocate funds where the risks are greatest. To help Ontarians withstand extreme weather events, IBC continues to: Advocate for the improvement of current sanitary/storm sewer infrastructure in the most vulnerable communities. Promote regular maintenance of infrastructure in communities less at risk. Encourage sound water management and land-use policies to control runoff that enters wastewater systems. Research ways to make homes and buildings more resilient to rain, extreme wind and fire. In May 2010, IBC presented the Watershed Awards in partnership with the Federation of Canadian Municipalities (FCM). The awards recognize communities from across the country that have taken steps to reduce their vulnerability to storm and wastewater damage. 8

9 KEEPING ONTARIANS SAFE Be Smart. Be Safe. Summer Tour 2010 Last summer, for the sixth consecutive year, IBC s awardwinning Be Smart. Be Safe. community outreach tour travelled the province teaching Ontarians how to lead safer lives and protect their property. Kathleen Wynne, ON Minister of Transportation, takes the DUMB Car 2.0 for a spin as Heather Mack, IBC Mgr of Government Relations, ON, looks on. IN 2010, THE ONTARIO TOUR: Visited 50 fairs and events. Covered 23,000 km over 141 days. Featured the new DUMB Car 2.0 driving simulator. Demonstrated the use of rain barrels to prevent basement flooding. Provided tips on what to include in an emergency survival kit. Throughout the tour, IBC donated $35,000 to community groups to help keep Ontarians safe. OPERATION RED NOSE (ORN) This was also the sixth year in a row that IBC sponsored Operation Red Nose in Ontario. Over the holiday season, 5,954 rides were given, 4,225 volunteers participated and $113,133 was raised for local charities. Ralph Palumbo, IBC s Vice-President, ON, and Tim Hudak, Leader of the Official Opposition, kick off ORN at Queen s Park on November 3,

10 ONTARIO AUTO INSURANCE On September 1, 2010, auto reforms to help control rising claims costs and provide consumers with more choice came into effect. As a result, Ontarians can now buy the type of coverage best suited to their specific needs in a province that continues to offer some of the richest accident benefits coverage in Canada. Unfortunately, the richness of Ontario s auto insurance benefits also attracts organized criminals determined to defraud the system. Their preferred method, particularly in and around the Greater Toronto Area (GTA), is to stage collisions, file false claims and then collect generous accident benefits. Often innocent motorists are tricked into participating and deliberately put in harm s way. This type of insurance fraud is more than an insurance industry issue: It is a serious policing and public safety issue. IBC continues to work closely with law enforcement authorities to combat organized insurance fraud and ensure that accident benefits are available for honest policyholders when they need them. PROJECT 92 Initiated by IBC with support from Toronto Police Service, Project 92 uncovered a highly organized staged collision ring operating in the GTA. To date, with the support of two dedicated prosecutors, nearly 300 criminal charges have been laid against 38 individuals. 10

11 INVESTING IN OUR COMMUNITIES Insurance has been called the oxygen of the economy. It facilitates economic growth by helping individuals and businesses take risks they couldn t otherwise take. When tragedy strikes or accidents happen, Canada s P&C insurers are there to help Canadians recover. In 2009, insurers paid out over $26 billion in claims. Canada s P&C insurance industry leaves a signifi cant and corporate bonds. Invested over $88 billion in government Employed over 114,000 Canadians. economic footprint. Across Canada, in 2009, the insurance industry: Paid $7.3 billion in taxes and levies to federal, provincial and municipal governments. In addition, Ontario insurers pay a $142 million annual health care levy to the Ontario Health Insurance Plan (OHIP) to cover the cost of treating people injured in automobile collisions Back to Policyholders (Claims) THE INSURANCE DOLLAR Where does your money go? 7-year national average ( ) 10.5 Profit 15.9 Back to Communities (Taxes) 20.5 Operating and Regulatory Costs DID YOU KNOW? The P&C insurance industry is one of the most highly taxed and regulated industries in Canada. Canada s P&C insurers are very conservative investors, with 83% of their investment portfolio in secure bonds and debentures making them less vulnerable to stock market fluctuations. Source: IBC, MSA Research 11

12 THE FACTS YOU NEED, AT A GLANCE. Insurance in Ontario: What You Need to Know provides important information at a glance about home, car and business insurance. Inside you ll find updates on key trends affecting insurance in Ontario such as severe weather and insurance fraud and learn what the industry is doing to help. Also inside are facts about the industry s economic footprint how private insurers contribute to Ontario s economy through jobs, investments and claims paid to policyholders in the wake of misfortune. Finally, you ll find tips and advice on how to control your premiums, get the best coverage and protect yourself, your family and your property against loss. Insurance Bureau of Canada representing Canada s private home, car and business insurers and promoting consumer understanding for over 45 years. QUESTIONS? WE RE HERE. In 2010, our Consumer Information Centre responded to over 16,000 inquiries on all aspects of home, car and business insurance. If you have questions or require additional copies of this booklet, please contact: Insurance Bureau of Canada s Consumer Information Centre Tel: Toll-free: (Ontario only) Hours: M F 8:00 a.m. 5:00 p.m. or visit ibc.ca ON/01/2011 Printed on 100% recycled paper